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Since the start of the financial crisis in 2008, the amount of consumer credit available to individuals has decreased significantly according to the Federal Reserve, and the credit that is still available is more difficult to obtain, with banks and other lenders raising their lending guidelines.  This combination of events has made it much more difficult for the average American to obtain credit cards, even as it has become increasingly difficult to pay for purchases with checks, and carrying cash to use for all purchases is inconvenient.

For people that would like to have the convenience of a credit card, but are unable to obtain one due to the reasons listed above, or don’t want to have additional credit shown on your credit report, prepaid debit cards like the Green Dot card are an excellent choice.  They offer many of the same consumer protections as credit cards, like the ability to use the card at any place where Visa and Mastercard are accepted, protection for your balance if the card is lost or stolen, and the ability to use the card without paying any fees.  They also can provide the same benefits as debit cards, like no-fee cash withdrawals at in-network ATMs, and the fact that you can’t charge more than the amount of money you have on the card, preventing the temptation to get into debt.

Another group that can benefit from the use of pre-paid debit cards is parents.  It is easy to load an allowance on a pre-paid debit card for a teen or college student without having to worry about whether they will overspend and put themselves into debt, or lose track of how much money is left in their account and rack up numerous overdraft charges, which can cost over $25.00 each. Setting up a pre-paid debit card with a recurring direct deposit allows a person to automatically provide a fixed amount of cash to a child, ensuring that they have access to enough money to spend without worrying about the downsides of using traditional credit or debit cards.

So, whether you are unable to obtain a credit or debit card due to changes in the financial sector, you are unwilling to jump through the hoops put in place by banks and credit card providers to obtain a card, or you want to provide a fixed amount of money for a specific purpose without having to monitor an account for activity, a pre-paid debit card could be for you.

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